When socialists destroy markets, shortages inevitably follow. The current situation in Venezuela is a great example, where just about everything from food to toilet paper has disappeared off store shelves. Rather than take a step back and say, "Wow, our policies sure have created a mess," socialists inevitably blame the shortages they created on private individuals. Nothing says "I am a socialist" like a politician denouncing their citizens for hording.

State Assemblywoman Linda Rosenthal, one of the [anti Airbnb] bill's sponsors, disagrees, claiming that it targets "people or companies with multiple listings. There are so many units held by commercial operators, not individual tenants. They are bad actors who horde multiple units, driving up the cost of housing around them and across the city."

kidmugsy:

CC:

Sorry, but people hording stuff doesn't even make sense. Such a claim reflects total ignorance of markets. The only type of hording that can work is for a cartel such as OPEC to withhold a good to drive up the price, but this claim applied to real estate implies that there is a secret cartel that has agreed to keep very expensive properties off the market at a loss to drive up the price. OPEC can do it because they simply decline to pump the oil. They don't BUY oil and then sit on it. And there is no cartel of real estate holders.

klgmac:

You can't have high mandated energy prices, high mandated healthcare prices, high mandated regulatory costs, high mandated labor costs, high taxes, low mandated rents and a generous supply of housing. NY has made it's choices.

jdgalt:

rxc:

What they (Venezuela and nyc ) need to do is to round up 100 prominent kulaks (hoarders)and publicly hang them. Then the officials should size all their property to make an example of their anti-social behavior.

Just like the EU is going to give the uk a hard time for daring to vote against EU membership.

Max:

CC:

For you as an individual to horde real estate in a way that affects availability, you would need to have huge holdings that you are keeping off the market. Is there any evidence anyone does that? Empty rental space still costs you money (mortgage payments, insurance, taxes...). A single individual keeping their space empty would have no affect on prices.

Joshua:

There are many such markers. My favorite is talking about wealth as a finite pie. As Jerry Brown said, "...those who have been blessed the most, who have disproportionately extracted, by whatever skill, more and more from the national wealth, they're going to have to share more of that." Because of course there's only as much wealth now as there was 500 years ago.

Another is when they blame "speculators" for price increases, but suspiciously forget about them when prices decrease. It shows they don't think that there's anything natural about prices, nor should there be.

joe - dallas:

Under the logic of Stevens dissent in CU (citizens United), since they are corporation and therefore dont have any rights including due process, why not just confiscate the property & then rent it out?

MJ:

There are enough suppliers of real estate in New York that each one of them is essentially a price taker. No single one of them has a large enough share of the market that they can exercise market power by themself. Besides, there would be an opportunity cost to doing so, namely losing out on rent by holding a vacant unit. And I'm sure the property taxes in NYC are nothing to sneeze at.

Dan Wendlick:

The problem has little to do with the actual supply of rental units in NYC, but rather the fact that the owners can generate a higher return at lower risk by renting them short-term as effectively hotel rooms than they can by leasing them long-term. This seems to indicate both a shortage of affordable hotel rooms and an overly regulated leasing market.

obloodyhell:

Matthew Slyfield:

"They are bad actors who horde multiple units, driving up the cost of housing around them and across the city."

Of course doing this is really only profitable because of the combinations of government enforced limits on housing supply and housing prices. Sub-letting can only be profitable as a business when there are multiple landlords renting units well below market prices. Without rent controls the building owners/operators would be charging enough in rent to make sub-letting unprofitable. Without the restricted supply of units, the market would push rents low enough to make sub-letting impossible.

Matthew Slyfield:

The problem the quote was complaining about was not hording in the usual sense, but commercialized sub-letting "which is out side of rent controls. It basically involves a commercial operator leasing a significant number of rent-controlled units and then sub-letting them at market rates.

The clue is this bit: "There are so many units held by commercial operators, not individual tenants."

This statement would be utter nonsense if it was referring to the building owners and/or the property management companies employed by the building owners.

It is only possible for this to be profitable as a business model because of the combination of rent controls and restricted housing supply.

Mike Powers:

Mike Powers:

Considering that Warren has written about how he doesn't like competitors using free "volunteer" labor, I should think he'd be in favor of regulatory bodies enforcing regulations equally across all parties.

Or that his 'non-profit' competitors aren't really non-profits in any meaningful way (they just pay their owners entirely in salaries rather than in profits). And, in the case of NYC, I'm sure his preferred solution would be to get rid of rent control not more rigorous enforcement.

MJ:

Even if such "hoarding" is going on, and I still doubt that any one or small number of commercial landlords is capable of amassing enough units to materially affect prices, the landlords still wouldn't be the ones responsible for driving up prices. After all, driving up prices wouldn't be possible if there weren't renters willing to pay such prices.

If Rosenthal were honest and consistent, she should be blaming the high level of demand for housing for the higher prices, while also recognizing that the higher prices could encourage greater supply if she and her fellow assembly-people, along with NYC council members, would allow it. Of course, I recognize that this explanation would run counter to the incentives faced by a vote-maximizing politician representing a low-information electorate.

Matthew Slyfield:

No, it's not an example of market participants finding a way to work around counterproductive regulation. It's an example of rent-seekers finding ways to profit somewhat unjustly* from counterproductive regulation.

*profits significantly exceed what would be possible in even a moderately freer housing market.